ACCC investigation finds over 80% of influencers post ‘misleading advertising’

More than 80 per cent of social media influencers are “taking advantage” of consumers by posting content that could be misleading and in breach of Australian Consumer Law, the Australian Consumer and Competition Commission (ACCC) has found.

The ACCC has put influencers on notice in recent years, and after a recent sweep of influencer content an overwhelming majority “were found to be making posts that raised concerns under the Australian Consumer Law for potentially misleading advertising,” the ACCC said.

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Fashion influencers had the highest number of concerning posts at 96 per cent of those reviewed, most commonly involving fast fashion brands targeted at younger consumers, followed by home and parenting influencers with 81 per cent of posts raising concerns.

The key influencer crimes are not disclosing brand relationships in posts, using vague or confusing language or graphics to describe brand relationships in posts, making incorrect statements about brands, products or services in posts and engaging in what the ACCC describes as “other concerning practices” such as subscription traps or multi-level marketing.

“Influencers often cultivate an image of themselves as being relatable and genuine, which can create an element of trust with their followers when it comes to recommendations,” ACCC acting chair Catriona Lowe said.

“Based on the findings of our sweep, we are concerned that influencers, brands and advertisers are taking advantage of consumers’ trust through hidden advertising in social media posts by influencers.”

“Many of the influencers we reviewed did not make adequate disclosures in their posts where it appeared they were receiving payment, gifts or other incentives to promote brands, products or services,” Ms Lowe said.

“We found that many influencers were formatting their posts to hide their advertising disclosure or make it difficult for consumers to notice it.”

The ACCC looked at influencer content on Instagram, TikTok, Snapchat, YouTube, Facebook and Twitch.

The review focused on monitoring the accounts of prominent Australian influencers with large followings, as well as some influencers with smaller followings.

When it comes to disclosing brand relationships, the ACCC said it is not enough to tag or thank a brand in posts, add a hashtag such as ‘sp’, ‘spon’, ‘sponcon’ ‘collab’, ‘creativepartner’ or ‘ambassador’, hide the disclosure at end of a lengthy caption or video, or make the disclosure in account bios rather than on individual posts.

Instead, influencers must clearly tag posts as ‘sponsored’ or ‘ad’ upfront “in a way that is immediately obvious to consumers,” the regulator said.

“This includes instances where the influencer has received free products, tickets or any other gifts or incentives.”

Multi-level marketing schemes were found to be more common among health, fitness and wellbeing influencers, some of whom “sought to promote multi-level marketing schemes disguised as ordinary health programs”, the ACCC said.

Health, fitness and wellbeing influencers were also called out for their use of subscription traps, where free trials for fitness programs turn into paid subscriptions that are difficult to cancel.

Home and parenting influencers were often guilty of using ‘confirm shaming’ tactics, which involves captioning promotional posts in a way that guilted or shamed followers into making a purchase, such as that they may not be acting in their child’s best interests.

The ACCC will release guidance in early 2024 for influencers and businesses to remind them of their obligations under the Australian Consumer Law to disclose advertising in social media posts.

Ms Lowe added that a “renewed focus on enforcement,” would follow the release of the guidelines.

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2023-12-08 12:35:18

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